Food producer RHM was valued at £958 million yesterday as the City clamoured for a slice of the maker of Hovis bread, Paxo stuffing and Mr Kipling cakes.

Investors ordered more than six times as many shares as were on offer in RHM, formerly known as Rank Hovis McDougall, ahead of the start of conditional dealings.

Shares in RHM were priced at 275p - close to the top of the range of 228p to 285p indicated by the Marlow, Buckinghamshire-based firm a fortnight ago.

Chief executive Ian McMahon expressed delight that the launch of RHM on the stock market attracted strong support among UK institutional investors and others worldwide. He said: "We have a clear strategy to continue RHM's transformation into the leading UK-focused food company and we are determined to create value for our shareholders by executing this strategy successfully."

Putting a 330p target on RHM's shares next year, Charlie Bonham, analyst at Oriel Securities, said: "It is probably the best quality high-yielder in the sector." RHM is one of the largest food companies in the UK and Ireland with sales of £1.53 billion in the year to April 30.

RHM, which employs more than 16,000 staff, is being sold by private equity firm Doughty Hanson, which bought RHM in 2000.

The offer comprises 63.8 per cent of shares in RHM with a further ten per cent being granted to the financial advisers of Doughty Hanson as an over-allotment option, essentially to ensure an orderly start to life to the stock market. Doughty Hanson will retain a major shareholding following the flotation. RHM has pledged to plough £125 million of the proceeds from the flotation into its pensions fund to halve the deficit.

Formerly Rank Hovis McDougall, it was established in 1875 as flour miller Joseph Rank. It grew over 50 years to become Britain's largest flour-miller. Joseph Rank's son, J Arthur Rank, inherited the flour company and moved into films in the 1930s. A devout Methodist who wanted to counter the influence of Hollywood on British values, he set up the Pinewood film studios and then Rank Organisation in 1937.